THE OILFIELDS (REGULATION AND DEVELOPMENT) ACT, 1948 
___________ 

ARRANGEMENT OF SECTIONS 
_________ 

SECTIONS 

1.  Short title, extent and commencement. 
2.  [Omitted.] 
3.  Definitions. 
4.  No mining lease to be valid unless it is in accordance with this Act. 
5.  Power to make rules as respects mining leases. 
6.  Power to make rules as respects mineral development. 
6A. Royalties in respect of mineral oils. 
7.  Power to make rules for modification of existing leases. 
8.  Delegation. 
9. 
10.  Laying of rules and notifications. 
11.  Power of inspection. 
12.  Relaxation of rules in special cases. 
13.  Act to be binding on the Government. 
14.  Protection of action taken in good faith. 

 Penalties. 

THE SCHEDULE. 

1 

 
 
THE OILFIELDS (REGULATION AND DEVELOPMENT) ACT, 1948 
ACT NO. 53 OF 19481 

[8th September, 1948.] 

An  Act  to  provide  for  the  regulation  of  2 *  *  *  oilfields  and  for  the  development  of               

3[mineral oil resources]. 

WHEREAS it is expedient in the public interest to provide for the regulation of 2* * * oilfields and for 
the development of  3[mineral oil resources] 4*  *  *; 

It is hereby enacted as follows:— 

1. Short title, extent and commencement.—(1) This Act may be called The 5[Oilfields] (Regulation 

and Development) Act, 1948. 

6 [(2) It extends to the whole of India 7*    *    *]. 

(3)  it  shall  come  into  force  on  such  date 8as  the  Central  Government  may,  by  notification  in  the 

Official Gazette, appoint in this behalf. 

2.  [Declaration  as  to  expediency  of  control  by  Central  Government.]  mitted  by  the  Mines  and 

Minerals  (Regulation  and  Development)  Act,  1957  (67  of  1957),  s.  32  and  the  Third  Schedule                 
(w.e. f. 1-6-1958).] 

3. Definitions.—In this Act, unless there is anything repugnant in the subject or context, — 

(a) the expressions “lessor” and “lessee” respectively include a licensor and licensee; 

(b) “mine” means any excavation for the purpose of searching for or obtaining 3[mineral oils] and 

includes an oilwell; 

(c) 3[“mineral oils”] include natural gas and petroleum; 

(d)  “mining  lease”  means  a  lease  granted  for  the  purpose  of  searching  for,  winning,  working, 
getting,  making  merchantable,  carrying  away  or  disposing  of  3[mineral  oils]  or  for  purposes 
connected therewith, and includes an exploring or a prospecting license; 

(e)  “oilfield”  means  any  area  where any  operation  for  the  purpose  of  obtaining  natural  gas  and 
petroleum, crude oil, refined oil, partially refined oil and any of the products of petroleum in a liquid 
or solid state, is to be or is being carried on. 

4.  No mining lease to be valid unless it is in accordance with this Act. —(1) No mining lease shall 
be granted after the commencement of this act otherwise than in accordance with the rules made under 
this Act. 

(2)  Any  mining  lease  granted  contrary  to  the  provisions  of  sub-section  (1)  shall  be  void  and  of  no 

effect. 

1. The Act comes into force in Pondicherry on 1-10-1963 vide Reg. 7 of 1963, s. 3 and the Schedule 1. 
2. The words “mines and, omitted by Act 67 of 1957, s. 32 and the Third Schedule (w.e.f. 1-6-1958). 
3. Subs. by s. 32 and the Third Schedule, ibid., for “minerals” (w.e.f. 1-6-1958). 
4. The words “to the extent hereinafter specified” omitted by s. 32 and the Third Schedule, ibid., (w.e.f. 1-6-1958). 
5. Subs. by s. 32 and the Third Schedule, ibid., for “Mines and Minerals” (w.e.f. 1-6-1958). 
6. Subs. by the A.O. 1950, for sub-section 2. 
7.  The  words  “except  the  State  of  Jammu  and  Kashmir”  omitted  by  Act  67  of  1957,  s.  32  and  the  Third  Schedule,                   

(w.e.f. 1-6-1958). 

8. 25th October, 1949 see Notification No. M-II-155 (24)-I, dated 18th October 1949, Gazette of India, Extraordinary, 1949.   

2 

                                                           
5.  Power  to  make  rules  as  respects  mining  leases.—(1)  The  Central  Government  may,  by 
notification in the Official Gazette, make rules for regulating the grant of mining leases or for prohibiting 
the grant of such leases in respect of any 1[mineral oil] or in any area. 

(2) In particular, and without prejudice to the generality of the foregoing power, such rules may provide 
for all or any of the following matters, namely: — 

(a)  the  manner  in  which,  the  1[mineral  oils]  or  areas  in  respect  of  which  and  the  persons  by 

whom, applications for mining leases may be made and the fees to be paid on any such application; 

(b) the authority by which, the terms on which, and the conditions subject to which, mining leases 

may be granted; 

(c) the maximum or minimum area and the period for which any mining lease may be granted, 

and the terms on which leases in respect of contiguous areas may be amalgamated; 

(d)  the  fixing  of  the  maximum  and  minimum  rent  payable  by  a  lessee,  whether  the  mine  is 

worked or not. 

6.  Power to make rules as respects mineral development.— (1)The Central Government may, by 

notification in the Official Gazette, make rules for the conservation and development of  2[mineral oils]. 

(2)  In  particular,  and  without  prejudice  to  the  generality  of  the  foregoing  power,  such  rules  may 

provide for all or any of the following matters, namely: — 

2*                                       *                                         *                                          *                                                   

(c) the development of any  3[mineral oil resources] in any area by prescribing or regulating the 

use of any engines, machinery or other equipment; 

(d) the regulation of drilling, re-drilling, deepening, shutting down, plugging and abandoning of 
oil wells in an oilfield and for the limitation or prohibition of such operations and for the taking of 
remedial measures to prevent waste of or damage to oil; 

(e) the regulation of the methods of producing oil in any oilfield, and the limitation or prohibition 

of such methods; 

(f)  the  compulsory  notification  of  all  new  borings  and  shaft  sinkings,  and  the  preservation  of 

boring records and specimens of cores of all new bore-holes; 

(g) the taking of samples from mines and new bore-holes; 

(h) the regulation of the arrangements for the storage of 2[mineral oils] and the stocks thereof that 

may be kept by any person; 

4[(i) the collection of royalties, and the levy and collection of fees or taxes, in respect of mineral 

oils mined, quarried, excavated or collected;] 

(j) the submission by the owners or lessees of mines of special or periodical returns and reports, 

and the forms in which and the authorities to whom such returns and reports shall be submitted. 

1. Subs. by Act 67 of 1957, s. 32 and the Third Schedule, for “minerals” (w.e.f.1-6-1958). 
2. Clauses (a) and (b) omitted by s. 32 and the Third Schedule, ibid., (w.e.f.1-6-1958). 
3. Subs. by s. 32 and the Third Schedule, ibid., for “mineral resources” (w.e.f.1-6-58). 
4. Subs. by Act 39 of 1969, s. 2, for clause (i) (w.e.f. 1-1-1968). 

3 

                                                           
1[6A.  Royalties  in  respect  of  mineral  oils.—(1) The  holders of  a  mining  lease  granted  before the 
commencement of the Oilfields (Regulation and Development) Amendment Act, 1969 (39 of 1969) shall, 
notwithstanding  anything  contained  in  the  instrument  of  lease  or  in  any  law  in  force  at  such 
commencement, pay royalty in respect of any mineral oil mined, quarried, excavated or collected by him 
from the leased area after such commencement, at the rate for the time being specified in the Schedule in 
respect of that mineral oil. 

(2)  The  holder  of  a  mining  lease  granted  on  or  after  the  commencement  of  the  Oilfields        

(Regulation  and  Development)  Amendment  Act,  1969  (39  of  1969)  shall  pay  royalty  in  respect  of  any 
mineral oil mined, quarried, excavated or collected by him from the leased area at the rate for the time 
being specified in the Schedule in respect of that mineral oil. 

(3)  Notwithstanding  anything  contained  in  sub-section  (1)  or  sub-section  (2),  no  royalty  shall  be 
payable in respect of any crude oil, casing-head condensate or natural gas which is unavoidably lost or is 
returned to the reservoir or is used for drilling or other operations relating to the production of petroleum, 
or natural gas, or both 

2[(4) The Central Government may, by notification in the Official Gazette, amend the Schedule so as 
to enhance or reduce the rate at which royalty shall be payable in respect of any mineral oil with effect 
from  such  date  as  may  be  specified  in  the  notification  and  different  rates  may  be  notified in respect of 
same mineral oil mined, quarried, excavated or collected from the areas covered by different classes of 
mining leases: 

Provided that the Central Government shall not fix the rates of royalty in respect of any mineral oil so 
as to exceed twenty per cent. of the sale price of the mineral oil at the oilfields or the oil well-head, as the 
case may be. 

(5) If the Central Government, with a view to encourage exploration in off-shore areas, is satisfied 
that it is necessary in the public interest so to do, it may, by notification in the Official Gazette, exempt 
generally,  either  absolutely  or  subject  to  such  conditions  as  may  be  specified  in  the  notification,      
mineral oil produced from such areas from the whole or any part of the royalty leviable thereon.] 

7. Power to make rules for modification of existing leases.—(1) The Central Government may, by 
notification  in  the  Official  Gazette,  make  rules  for  the  purpose  of  modifying  or  altering  the  terms  and 
conditions of any mining lease granted prior to the commencement of this Act so as to bring such lease 
into conformity with the rules made under sections 5 and 6: 

Provided  that  any  rules  so  made  which  provide  for  the  matters  mentioned  in  clause  (c)  of                

sub-section  (2)  shall  not  come  into  force  until  they  have  been  approved,  either  with  or  without 
modifications, by 3[the House of the People]. 

(2) The rules made under sub-section (1) shall provide— 

(a) for giving previous notice of the modification or alteration proposed to be made thereunder to 
the lessee, and where the lessor is not the Central Government, also to the lessor, and for affording 
them an opportunity of showing cause against the proposal; 

(b)  for  the  payment  of  compensation  by  the  party  who  would  be  benefited  by  the  proposed 
modification  or  alteration  to  the  party  whose  right  under  the  existing  lease  would  thereby  be 
adversely affected; and 

1. Ins. by Act 39 of 1969, s. 3, (w.e.f. 1-1-1968). 
2. Subs. by Act 29 of 1998, s. 2, for sub-section (4) (w.e.f. 3-9-1998). 
3. Subs. by the A. O. 1950, for “the Central Legislature” 

4 

                                                           
(c)  for  the  principles  on  which,  the  manner  in  which  and  the  authority  by  which  the  said 

compensation shall be determined. 

8. Delegation.—The Central Government may, by notification in the Official Gazette, direct that any 
power  exercisable  under  this  Act  shall  be  exercised,  subject  to  such  conditions,  if  any,  as  may  be 
specified therein by such officer or authority as may be specified in the direction. 

9.  Penalties.—(1)  Any  rule  made  under  any  of  the  provisions  of  this  Act  may  provide  that  any 
contravention thereof shall be punishable with imprisonment which may extend to six months or with fine 
which may extend to one thousand rupees or with both. 

(2) Whoever, after having been convicted of any offence referred to in  sub-section (1), continues to 
commit such offence shall be punishable for each day after the date of the first conviction during which 
he continues so to offend, with fine which may extend to one hundred rupees. 

1[10.  Laying  of  rules  and  notifications.—Every  rule  made  under  this  Act  and  every  notification 
issued 2[under sub-section (4) or sub-section (5) of section 6A] shall be laid, as soon as may be after it is 
made or issued, before each House of Parliament, while it is in session, for a total period of thirty days 
which may be comprised in one session or in two or more successive sessions, and if, before the expiry of 
the session immediately following the session or the successive sessions aforesaid, both Houses agree in 
making  any  modification  in  the  rule  or  notification  or  both  Houses  agree  that  the  rule  or  notification 
should not be made or issued, the rule or notification shall thereafter have effect only in such modified 
form or be of no effect, as the case may be; so, however, that any such modification or annulment shall be 
without prejudice to the validity of anything previously done under that rule or notification.] 

11. Power of inspection.—(1) For the purpose of ascertaining the position of the working, actual or 
prospective, of any mine or abandoned mine or for any other purpose mentioned in this Act or the rules 
made  thereunder,  any  officer  authorised  by  the  Central  Government  in  this  behalf  shall  have  the           
right to— 

(a) enter and inspect any mine; 

(b) order the production of any document, book, register or record in the possession or power of 

any person having the control of, or connected with, any mine; 

(c) examine any person having the control of, or connected with, any mine. 

(2) Any officer authorised by the Central Government under sub-section (1) shall be deemed to be a 

public servant within the meaning of section 21 of the Indian Penal Code (45 of 1860). 

12. Relaxation of rules in special cases.—The Central Government may, if satisfied that it is in the 
public  interest  so  to  do,  authorise  in  any  case  the  granting  of  any  mining  lease,  or  the  working  of  any 
mine on terms and conditions different from those laid down in the rules made under sections 5 and 6. 

3[13.  Act  to  be  binding  on  the  Government.—The provisions of this Act shall be binding on the 

Government.] 

14.  Protection  of  action  taken  in  good  faith.—No  suit,  prosecution  or  other  legal  proceeding 
whatever  shall  lie  against  any  person  for  anything  which  is  in  good  faith  done  or  intended  to  be  done 
under this Act. 

1. Subs. by Act 20 of 1984, s. 3, for the original section 10.  
2. Subs. by Act 29 of 1998, s. 3, for “under sub-section (4) of section 6A” (w.e.f. 3-9-1998).  
3. Subs. by the A. O. 1950, for s. 13 (w.e.f. 26-1-1950). 

5 

 
 
                                                           
 
1[THE SCHEDULE 

(See section 6A) 

RATES OF ROYALTY 

1. CRUDE OIL: 

(1)  PRODUCTION  FROM  AREAS  OUTSIDE  NEW  EXPLORATION  LICENSING  POLICY 

(NELP) REGIME 

A. NOMINATION BLOCKS 
(i) from 1.4.1993 to 31.3.1996: @ Rs. 539.20 Per Metric Tonne 
(ii) from 1.4.1996 to 31.3.1998: @ Rs. 603.95 Per Metric Tonne 

B.  PRODUCTION  FROM  AREAS  AWARDED  ON  NOMINATION  BASIS  TO  NATIONAL 
OIL  COMPANIES  (NOCs),  EXPLORATION  BLOCKS  AWARDED  TO  PRIVATE/  JOINT 
VENTURE  CONTRACTORS  PRIOR  TO  NEW  EXPLORATION  LICENSING  POLICY  (NELP) 
AND  ONLAND  DISCOVERED  FIELDS  AWARDED  TO  PRIVATE/JOINT  VENTURE 
CONTRACTORS: 

(i) from 1.4.1998 to 31.3.2002 : Monthly average rate per Metric Tonne as per Statement 

appended; 

(ii) With effect from 1.4.2002: 

(a) On land areas: @ 20% of Well Head Price 
(b) Shallow water offshore areas (upto 400 Mtr water depth): @ 10% of Well Head Price 
(c) Deep water offshore areas (> 400 Mtr. Water depth) : @ 5 % of well head price during 
first 7 years after commercial production and normal rates as applicable to Shallow water areas 
(upto 400 Mtr. Water depth) during other periods. 

(d) Heavier Crude Oils of 25° API and less : 2.5% lesser than the applicable rates as above 
(e) Reduced rates of royalty, as may be notified by the Government from time to time, will be 
levied on production from fields under Enhanced Oil Recovery (EOR)/ Improved Oil Recovery 
(IOR). 
C.  PRODUCTION  FROM  OFFSHORE  DISCOVERED  FIELDS  AWARDED  TO  PRIVATE 

/JOINT VENTURE CONTRACTORS: 

At the rates as specified in respective Production Sharing Contracts (PSCs) 
(2) PRODUCTION FROM AREAS UNDER NELP REGIME: 

At the rates determined in accordance with the provisions under respective Production Sharing 
Contracts (PSCs). 

2[(3) Production from contracts awarded under Bid Round-1 of Discovered Small Field Policy, 2015:] 

(a)  3 [12.5  per  cent  of  the  value  of  crude  oil  receivable  from  the  buyer  in  respect  of 

production from  on-shore contracts. 

(b) 10 per cent of the value of crude oil receivable from the buyers in respect of production 
from  deep  water  off-shore  (>400  meters  water  depth)  contracts  for  the  first  seven  years  after 
commercial production in the contract area and normal rates as applicable to shallow water (up 
to 400 meters water depth) contracts during remaining periods.] 

1. Ins. by Act 39 of 1969, s. 4 (w.e.f. 1-1-1968). 
2. Ins. by S.O. 173(E), dated 15. 01. 2016. 
3. Ins. by S.O. 173(E), dated 15.01. 2016. 

6 

 
 
                                                           
1[(4) Production form contracts awarded under Bid Round-II of Discovered Small Field Policy and 

Hydrocarbon Exploration and Licensing Policy (HELP): 

(a) for on-land blocks: 12.5% 

(b) for shallow water : 7. 5% 

(c)  for  deep  water  :  no  royalty  shall  be  payable  for  the  first  seven  years  from  the  date  of 

commercial production of crude oil from deep water and shall be payable at 5% thereafter. 

(d) for ultra deep water: no royalty shall be payable for the first seven years from the date of 

commercial production of crude oil form ultra deep water and shall be payable at 2% thereafter.] 

2[(5)  Concessional  rates  of  royalty  in  case  of  early  commercial  production  from  contract  areas 

awarded under Hydrocarbon Exploration and Licensing Policy: 

For contract areas awarded under Hydrocarbon Exploration and  Licensing Policy in respect of bids 
invited  on  or  after  the  coming  into  force  of  this  paragraph,  concessional  rates  of  royalty  shall  apply  if 
there is early commencement of commercial production as below: 

(A) In case of on-hand blocks: 

If  commercial  production  is  commenced  within  four  years  from  the  effective  date  as  specified  in  the 
respective contract: 

(a) in Category—I Basins: 11.25% 

(b) in Category—II Basins: 10% 

(c) in Category—III Basins: 8.75% 

(B) In case of shallow water blocks; 

If commercial production is commenced within four years from the effective date as specified 

in the respective contract: 

(a) in Category—I Basins: 6.75% 

(b) in Category—II Basins: 6% 

(c) in Category—III Basins: 5.25% 

(C) In case of deep water blocks; 

If commercial production is commenced within five years from the effective date as specified 

in the respective contract: 

No royalty shall be payable for the first seven years from the date of commercial production 

and shall be payable thereafter as below: 

(a) in Category—I Basins: 4.5% 

(b) in Category—II Basins: 4% 

(c) in Category—II Basins: 3.5% 

(D) In case of ultra deep water blocks: 

If commercial production is commenced within five years from the effective date specified in 

the respective contract: 

No royalty shall be payable for the first seven years from the date of commercial production 

and shall be payable thereafter as below: 

(a) in Category—I Basins: 1.8% 

1. Ins. by S.O. 367(E), dated 14.1.2019. 
2. Ins. by S.O. 1597, dated 11.4.2019. 

7 

                                                           
(b) in Category—II Basins: 1.6% 

(c) in Category—III Basins:1.4%.] 

2. CASING HEAD CONDENSATE: 

(1)  PRODUCTION  FROM  AREAS  OUTSIDE  NEW  EXPLORATION  LICENSING  POLICY 

(NELP) REGIME 

A. NOMINATION BLOCKS 

(i) from 1.4.1993 to 31.3.1996: @ Rs. 539.20 Per Metric Tonne 
(ii) from 1.4.1996 to 31.3.1998: @ Rs. 603.95 Per Metric Tonne 

B. PRODUCTION FROM AREAS AWARDED ON NOMINATION BASIS TO NATIONAL OIL 
COMPANIES  (NOCS),  EXPLORATION  BLOCKS  AWARDED  TO  PRIVATE/  JOINT  VENTURE 
(PRIVATE /JOINT VENTURE) CONTRACTORS PRIOR TO NELP AND ONLAND DISCOVERED 
FIELDS AWARDED TO PRIVATE/JOINT VENTURE CONTRACTORS: 

(i)  from  1.4.1998  to  31.3.2002  :  Monthly  average  rate  per  Metric  Tonne  as  per  Statement 

appended: 

(ii) With effect from 1.4.2002: 

(a) On land areas: @ 20% of Well Head Price. 

(b) Shallow water offshore areas (upto 400 Mtr water depth): @ 10% of Well Head Price. 

(c) Deep water offshore areas (> 400 Mtr. Water depth): @ 5% of well head price during first 
7 years after commercial production and normal rates as applicable to Shallow water areas (upto 
400 Mtr. Water depth) during other periods. 

(d) Reduced rates of royalty, as may be notified by the Government from time to time, will be 
levied on production from fields under Enhanced Oil Recovery (EOR)/ Improved Oil Recovery 
(IOR). 

C.  PRODUCTION  FROM  OFFSHORE  DISCOVERED  FIELDS  AWARDED  TO  PRIVATE 

/JOINT VENTURE CONTRACTORS: 

At the rates as specified in respective Production Sharing Contracts (PSCs). 

(2) PRODUCTION FROM AREAS UNDER NELP REGIME: 
\At the rates determined in accordance with the provisions under respective Production Sharing Contracts 
(PSCs). 

1[(3) Production from contracts awarded under Bid Round-II of Discovered Small Field Policy, 2015:] 

2[(a) 12.5 per cent of the value of condensate receivable from the buyer in respect of production 

from on-shore contracts. 

(b) 10 per cent of the value  of condensate receivable from the buyers in respect of production 

from off-shore shallow water (up to 400 meters water depth) contracts. 

(c) 5 per cent of the value of condensate receivable from the buyers in respect of production from 
deep  water  offshore (>400  meters  water  depth)  contracts for the  first  seven  years  after  commercial 
production  in  the  contract  area  and  normal  rates  as  applicable  to  shallow  water  (up  to  400  meters 
water depth) contracts during remaining periods.] 

1. Ins. by S.O. 173 (E), dated 15.1.2016 and further substituted by S.O. 367(E), dated 14.1.2019. 
2. Ins. by S.O. 173(E), dated 15.1.2016. 

8 

 
                                                           
1[(4) In respect of production form contracts awarded under Bid Round-II of Discovered Small Field 
Policy and Hydrocarbon Exploration and Licensing Policy (HELP) all the provisions of royalty on crude 
oil shall apply mutatis mutandis to condensates.”] 

2[(5)  In  respect  of  early  commencement  of  commercial  production  from  contracts  areas  awarded 
under  Hydrocarbon  Exploration  and  Licensing  Policy  in  respect  of  bids  invited  on  or  after  the  coming 
into  force  of  this  paragraph,  all  the  provisions  of  concessional  rates  of  royalty  applicable  for  crude  oil 
shall apply mutatis mutandis to condensates.] 
3[3. NATURAL GAS: 

(1) 10% of the value of the natural gas obtained at well-head. 

(2) Production of natural gas from contracts awarded under Bid Round-I of Discovered Small Field 

Policy, 2015: 

(a) 10% of the value of natural gas receivable from the buyer in respect of production from on-

shore contracts and off-shore shallow water (up to 400 meters water depth) contracts; 

(b) 5% of the value of natural gas from the buyers in respect of production from deep water off-
shore (>400 meters water depth) contracts for the first seven years after commercial production in the 
contract area and normal rates as applicable to shallow water (up to 400 meters water depth) contracts 
during remaining periods. 

(3)  Production  form  contracts  awarded  under  Bid  Round-II  of  Discovered  Small  Field  Policy  and 

Hydrocarbon Exploration and Licensing Policy (HELP): 

(a) for on-land blocks: 10% 

(b) for shallow water : 7. 5% 

(c)  for  deep  water  :  no  royalty  shall  be  payable  for  the  first  seven  years  from  the  date  of 

commercial production of crude oil from deep water and shall be payable at 5% thereafter. 

(d) for ultra deep water: no royalty shall be payable for the first seven years from the date of 

commercial production of crude oil form ultra deep water and shall be payable at 2% thereafter. 

4[(4)  Concessional  rates  of  royalty  in  case  of  early  commercial  production  from  contract  areas 

awarded under Hydrocarbon Exploration and Licensing Policy: 

For contract areas awarded under Hydrocarbon Exploration and Licensing Policy in respect of bids 
invited  on  or  after  the  coming  into  force  of  this  paragraph,  concessional  rates  of  royalty  shall  apply  if 
there is early commencement of commercial production as below: 

(A) In case of on-hand blocks: 

If commercial production is commenced within four years from the effective date as specified in the 
respective contract: 

(a) in Category—I Basins: 9% 

(b) in Category—II Basins: 8% 

(c) in Category—III Basins:7% 

(B) In case of shallow water blocks; 

If commercial production is commenced within four years from the effective date as specified 

in the respective contract: 

(a) in Category—I Basins: 6.75% 

1. Ins. by S.O. 367(E), dated 14.1.2019. 
2. Ins. by S.O. 1597(E), dated 11.4.2019. 
3. Subs. by S.O. 367(E), dated 14.1.2019. 
4. Ins. by S.O. 1597(E), dated 11.4.2019. 

9 

                                                           
(b) in Category—II Basins: 6% 

(c) in Category—III Basins: 5.25% 

(C) In case of deep water blocks; 

If commercial production is commenced within five years from the effective date as specified 

in the respective contract: 

No royalty shall be payable for the first seven years from the date of commercial production 

and shall be payable thereafter as below: 

(a) in Category—I Basins: 4.5% 

(b) in Category—II Basins:4% 

(c) in Category—II Basins: 3.5% 

(D) In case of ultra deep water blocks: 

If commercial production is commenced within five years from the effective date specified in 

the respective contract: 

No royalty shall be payable for the first seven years from the date of commercial production 

and shall be payable thereafter as below: 

(a) in Category—I Basins: 1.8% 

(b) in Category—II Basins: 1.6% 

(c) in Category—III Basins:1.4% 

(5) Additional production from existing Administered Price Mechanism field (APM Fields): 

The additional production of gas from APM Fields over and above Business as Usual (BAU) scenario 
which  has  been  evaluated  by  third  party  expert  agency  and  approved  by  Directorate  General  of 
Hydrocarbons shall be eligible in rates of royalty by ten per cent of the existing applicable rates.] 

1[Note 1:  2[(1) The well head price of crude oil and casing head condensate for nominated blocks shall be 
determined  by  making  the  following  deductions  from  the  sale  price  of  crude  oil  and  casing  head 
condensate: 

(a) in case of Oil and Natural Gas Corporation Limited. 

i. three thousand nine hundred and fifty—five rupees per metric tonne for On share; and 

ii. two thousand two hundred and twenty—six rupees per metric tonne for Off shares. 

(b)  in  case  of  Oil  India  Limited,  two  thousand  eight  hundred  and  twenty  eight  rupees  per  metric 
tonne.] 

(2)  The  amounts  specified  in  clause  (1)  shall  be  the  post-well  head  cost  which  shall  be  valid  for  a 

period of three years with effect from 3[1st April, 2021] or such period till the revised rates are notified. 

(3) Oil Industry Development Cess and Education Cess thereon shall not form part of post well head 

cost. 

(4) Royalty will be calculated on cum-royalty basis as under: 

Royalty amount =  

Well head price x royalty rate 
(100 + royalty rate).] 

1. Subs. by GSR. 559(E), dated 20.8.2007. 
2. Subs. by S.O. 4382(E), dated 20.10.2021. 
3. ibid., 

10 

                                                           
Note  2:  Since  consultations  with  the  concerned  State  Governments  took  some  time,  it  has  become 
necessary to revise the rate of royalty with retrospective effect. The oil producing States stand to benefit 
and other States are not likely to be adversely affected. 

1[Note 3: The post well head cost for the purpose of calculating well head price of crude oil or casing 
head condensate for cases other than nominated blocks of Oil and Natural Gas Corporation Limited or Oil 
India Limited and for natural gas in all cases other than Administered Price Mechanism gas of Oil and 
Natural Gas Corporation Limited or Oil India Limited shall be determined as under: 

(1) Per unit rate of post well head cost, that is, per metric tonne or barrel for crude oil or casing head 
condensate  and  per  Million  Metric  British  Thermal  Unit  for  natural  gas  shall  be  determined  based  on 
actual post well head expenditure reported in previous year's audited accounts. 

(2) In case of production from a new field under the Production Sharing Contract, the post well head 
cost for the first year may be provisionally estimated by the lessee and duly certified by the Directorate 
General of Hydro -carbons and final adjustments shall be made within one hundred twenty days from the 
end of the first year, based on the audited accounts of the first year. 

(3)  Oil  Industry  Development  Cess  and  Education  Cess,  Depreciation  expense,  Income  Tax, 

surcharge thereon and profit petroleum shall not be allowed as expenditure under post well head cost. 

(4) Full records shall be maintained and got audited by lesses or procedures to assess the actual post 

well head cost incurred in previous year. 

2[(5) Royalty shall be computed on ex-royalty basis : 

Provided  that  for  crude  oil  produced  from  production  sharing  contracts  signed  with  private  or 
joint-venture  contractors  prior  to  New  Exploration  Licensing  Policy,  royalty  shall  be  computed  on 
cum-royalty basis.] 

3Note 4. For the purposes of the concessional rates of royalty for crude oil, condensates and natural gas, 
the categorization of sedimentary basins of India shall be as under: 

Category-I 
1.  Krishna-Godavari 
Basin 
2.  Mumbai  Offshore 
basin 
3. Assam Shelf Basin 
4. Rajasthan Basin 
5. Cauvery Basin 
6.  Assam-Arakan  Fold 
Belt 
7. Cambay Basin 

Category-II 
1. Suarashtra Basin 

Category-III 
1. Kerala-Konkan Basin 

2. Kutch Basin 

2. Bengal-Purnea Basin` 

3. Vindhyan Basin 
4. Mahanadi Basin 
5. Andaman-Nicobar Basin 

3. Ganga-Punjab Basin 
4. Pranhita-Godavari Basin 
5. Satpura-South Rewa-Damodar Basin 
6. Himalayan Foreland 

7. Chhattisgarh Basin 
8. Narmada Basin 
9. Spiti-Zankar Basin 
10. Deccan Syneclise Basin 
11. Cuddapah Basin 
12. Karewa Basin 
13. Bhima-Kaladgi Basin 
14. Bastar Basin 

1. Ins. by GSR.559(E), dated 20 August, 2007 
2. Ins. by GSR 559(E), dated 20 August, 2007 and substituted by S.O. 615(E), dated 28 August, 2009. 
3. Note 4 and Table ins. by S.O. 1597(E), dated 11 August, 2019. 

11 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                           
STATEMENT OF MONTHLY AVERAGE RATES OF ROYALTY PAYABLE AS PER METRIC 
TONNE ON CRUDE OIL & CASING HEAD CONDENSATE AS MENTIONED AT 1 (1) (B) (i) 
ABOVE. 

Month 

Royalty rates 

Month 

Royalty rates 

Details of Monthly Royalty Rates 

Apr-98 

May-98 

Jun-98 

Jul-98 

Aug-98 

Sep-98 

Oct-98 

Nov-98 

Dec-98 

Jan-99 

Feb-99 

Mar-99 

Apr-99 

May-99 

Jun-99 

01 Jul to 14 JUL-99 

15 Jul to 31 JUL-99 

Aug-99 

Sep-99 

Oct-99 

Nov-99 

Dec-99 

Jan-99 

Feb-00 

Mar-00 

(Rs./MT) 

411.31 

409.46 

414.09 

431.35 

415.32 

450.01 

431.35 

483.15 

462.8 

406.53 

368.45 

398.67 

374.77 

511.06 

569.64 

569.64 

580.74 

602.17 

706.54 

769.29 

858.7 

846.99 

942.11 

958.91 

965.39 

1055.88 

1037.69 

915.75 

1100.28 

1165.03 

1126.65 

1180.45 

1331.69 

1279.89 

1298.23 

973.71 

1009.02 

1104.29 

1040.62 

1091.19 

1165.5 

1171.05 

1066.21 

1113.39 

1106.76 

904.03 

808.29 

815.29 

815.77 

Apr-00 

May-00 

Jun-00 

Jul-00 

Aug-00 

Sep-00 

Oct-00 

Nov-00 

Dec-00 

Jan-01 

Feb-01 

Mar-01 

Apr-01 

May-01 

Jun-01 

Jul-01 

Aug-01 

Sep-01 

Oct-01 

Nov-01 

Dec-01 

Jan-02 

Feb-02 

Mar-01 

12 

 
 
 
 
 
 
